|Four insurance companies have 55 percent of the Oklahoma earthquake insurance market. The data was released at Tuesday’s hearing to determine the competitiveness of the coverage in Oklahoma. Insurance Commissioner John D. Doak called the hearing after carriers filed significant rate increases, dropped lower deductible options or decided to stop writing new earthquake insurance policies.
“My number one priority is to protect the citizens of Oklahoma,” said Doak. “Due to several factors, including market concentration and very low loss ratios, I believe the Oklahoma earthquake insurance market may not be competitive. If true, we must take action to protect consumers.”
OID Market Regulation Chief Brian Gabbert released the following data at the hearing:
“Companies have to be prepared for a Northridge-type earthquake,” said Joe Woods, Property Casualty Insurers Association of America. “More regulation is likely to make the market concentration situation worse because it puts more pressure on smaller companies that might just give up.”
Under state law, property and casualty rates adhere to the “use and file” system. Under the “use and file” system, insurers may implement a rate increase then notify the OID after the fact. However, if the line of business is found to be “not competitive” the rating laws revert to a “file and use” system, sometimes called a “prior approval” system, where rates must be filed and draw no opposition from the Commissioner before they can be used.
“Commissioner Doak has the full support of the Attorney General’s Office,” said Julie Bays, assistant attorney general. “Our offices work together to protect consumers and he’s done a fabulous job at that.”
Commissioner Doak will announce his decision in the next 30 days.
Earthquake Insurance Outreach
The OID is hosting earthquake outreach events across the state. At these events, consumers can speak one-on-one with an OID representative. The remaining schedule is listed below.
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